A Little Latenight Euro News

It's late in Europe, where the Eurogroup just wrapped up a
meeting on Greece and the rest of the mess.

Here's the note that was just put out, where they say nice things
about stability and flexibility, and preventing contagion. Of
note: The possibility that the European Financial Stability Fund
could see an expanded news:

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Ministers reaffirmed their absolute commitment to safeguard
financial stability in the euro area. To this end, Ministers
stand ready to adopt further measures that will improve the euro
area’s systemic capacity to resist contagion risk, including
enhancing the flexibility and the scope of the EFSF, lengthening
the maturities of the loans and lowering the interest rates,
including through a collateral arrangement where appropriate.
Proposals to this effect will be presented to Ministers
shortly.

Ministers discussed the main parameters of a new multi-annual
adjustment programme for Greece, which will build on strong
commitments to fiscal consolidation, ambitious growth-enhancing
structural reforms and a substantial privatisation of state
assets. Ministers welcomed the reinforcement of monitoring
mechanisms of the programme of Greece, the nomination of the
board of the privatisation agency, which comprises two observers
representing euro area Member States and the European Commission,
and agreed to provide extended technical assistance to Greece.
They called upon the Greek government to sustain its on-going
efforts to meet these commitments in full and on time.

Ministers welcomed the decision by the IMF to disburse the latest
tranche of financial assistance to Greece, as well as the
proposals from the private sector to voluntarily contribute to
the financing of a second programme, building on the work already
underway. The ECB confirmed its position, reaffirmed by its
Governing Council last Thursday, that a credit event or selective
default should be avoided.
While the responsibility for resolving the crisis in Greece lies
primarily with Greece, Ministers recognised the need for a
broader and more forward-looking policy response to assist the
government in its efforts to bolster debt sustainability and
thereby safeguard financial stability in the euro area.

In this context, Ministers have tasked the Eurogroup Working
Group to propose measures to reinforce the current policy
response to the crisis in Greece. The Eurogroup Working Group
will notably explore the modalities for financing a new
multi-annual adjustment programme, steps to reduce the cost of
debt-servicing and means to improve the sustainability of Greek
public debt. This reinforced strategy should provide the basis
for an agreement in the Eurogroup on the main elements and
financing of a second adjustment programme for Greece
shortly.

Ministers commit to continue negotiating with the European
Parliament the legislative proposals to reinforce economic
governance in the European Union in order to agree on an
ambitious reform as soon as possible. The reinforced governance
should be fully operational without delay.
11 July 2011